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EX-2.1 - AGREEMENT AND PLAN OF MERGER - BARE ESCENTUALS INCdex21.htm
EX-99.1 - PRESS RELEASE - BARE ESCENTUALS INCdex991.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT

(DATE OF EARLIEST EVENT REPORTED):

January 14, 2010

 

 

BARE ESCENTUALS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-33048   20-1062857

(State or other jurisdiction of

incorporation or organization)

  (Commission file number)  

(IRS employer

identification number)

71 Stevenson Street, 22nd Floor

San Francisco, CA, 94105

(Address of Principal Executive Offices) (Zip Code)

(415) 489-5000

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Merger Agreement

On January 14, 2010, Bare Escentuals, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shiseido Company, Limited, a Japanese corporation (“Parent”), and Blush Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Parent (“Purchaser”). Pursuant to the terms of the Merger Agreement, and subject to the conditions thereof, Purchaser has agreed to commence a tender offer (the “Offer”) to purchase all of the outstanding shares of the Company’s common stock, par value $0.001 per share (the “Shares”), for $18.20 per Share, net to the holders thereof in cash (the “Per Share Amount”), subject to applicable withholding taxes.

Parent has agreed that Purchaser will commence the Offer within 10 business days after the date of the Merger Agreement. The Offer will remain open for 30 business days, subject to periods of extension through May 31, 2010 if the conditions to the Offer have not been satisfied at the end of any Offer period (subject to the parties’ termination rights under the Merger Agreement). Purchaser’s obligation to accept for payment and pay for all Shares tendered is subject to a number of conditions, including: (i) at least a majority of the Shares then outstanding, on a fully diluted basis, having been validly tendered in (and not withdrawn from) the Offer, (ii) continued employment of Leslie Blodgett (“Ms. Blodgett”) as the Company’s Chief Executive Officer and her ability to fulfill her duties in such capacity, (iii) the receipt of required regulatory approvals, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iv) the absence of a material adverse effect on the Company, (v) the continuation of the Ancillary Agreements (as defined in the Merger Agreement) entered into in connection with the Merger Agreement, including the Stockholders Support Agreement and Contribution Agreement described below, and (vi) other customary conditions. The completion of the Offer is not contingent upon the receipt of financing by Parent or Purchaser.

In connection with and as a condition to the Offer, Ms. Blodgett has entered into a Contribution Agreement. Subject to the terms and conditions of the Contribution Agreement, Ms. Blodgett has agreed, among other things, (i) immediately following consummation of the Offer, to contribute certain of her Shares to an indirect subsidiary of Parent in exchange for cash for a portion of such Shares at the Per Share Amount and an indirect ownership interest in the Company and (ii) if required, to vote her Shares in favor of adoption of the Merger Agreement. The Shares owned by Ms. Blodgett and not contributed to a subsidiary of Parent will be converted into the Per Share Amount pursuant to the Merger. The Contribution Agreement will terminate upon the earlier to occur of the termination of the Merger Agreement and the effective date of the Merger. In addition, in connection with and as a condition to the Offer, Berkshire Partners LLC and certain of its affiliated funds (collectively, the “Berkshire Investors”) have entered into a Stockholders Support Agreement. Subject to the terms and conditions of the Stockholders Support Agreement, each Berkshire Investor has agreed (i) to tender all of its beneficially owned Shares in the Offer and (ii) if required, to vote all of its beneficially owned Shares in favor of adoption of the Merger Agreement. The Stockholders Support Agreement will terminate upon the earlier to occur of the termination of the Merger Agreement and the effective date of the Merger.

 

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Following the consummation of the Offer and contribution of Shares by Ms. Blodgett as described above, subject to customary conditions (including receipt of the requisite approval of the Company’s stockholders, if required under applicable law), Purchaser will be merged with and into the Company (the “Merger”), with the Company as the surviving corporation. In the Merger, each outstanding Share (other than Shares with respect to which appraisal rights are properly exercised) will be converted into the right to receive the Per Share Amount. The parties have agreed that if, following completion of the Offer, Purchaser owns at least 90% of the then outstanding Shares, the Merger will be completed without a meeting of Company stockholders pursuant to Delaware’s “short form” merger statute. In furtherance thereof, Purchaser may, but is not required to, provide for a “subsequent offering period” in accordance with applicable law following the consummation of the Offer in order to seek additional Shares to facilitate the consummation of the Merger using such short form merger procedures.

In addition, the Company has granted to Purchaser, subject to certain conditions and limitations, an irrevocable option to purchase at the Per Share Amount an aggregate number of Shares that, when added to the number of Shares owned by Parent and Purchaser following the consummation of the Offer, constitute one share more than 90% of the Shares then outstanding, subject to there being authorized Shares available for issuance and no requirement for the approval of the Company’s stockholders (the “Top Up Option”). The Top Up Option is intended to expedite the timing of the completion of the Merger by permitting the Merger to occur pursuant to Delaware’s “short form” merger statute.

In the event that Purchaser does not hold at least 90% of the Company’s outstanding Shares following the consummation of the Offer (including the “subsequent offering period” provided by Purchaser, if any) and the exercise of the Top Up Option, the Company must obtain the approval of the Company’s stockholders to consummate the Merger. In this event, the Company will call and convene a stockholder meeting to obtain this approval, and Parent and Purchaser will vote all Shares acquired by them pursuant to the Offer in favor of the adoption of the Merger Agreement and the consummation of the Merger, thereby assuring approval of the Merger.

The Merger Agreement provides that (i) each stock option granted by the Company to acquire Shares (each, an “Option”) that is outstanding and unexercised at the time of the Merger will vest in full and be cancelled and converted into the right to receive an amount in cash equal to the number of Shares subject to such option multiplied by an amount equal to the Per Share Amount less the applicable exercise price, (ii) each Share that is subject to a risk of forfeiture (each, a “Restricted Share”) that is outstanding at the time of the Merger will vest in full and be converted into the right to receive the Per Share Amount and (iii) each right to acquire or receive Shares or benefits measured by the value of Shares, and each award of any kind consisting of Shares that may be held for issuance under the Company’s equity incentive plans, other than Options and Restricted Shares (the “Company Awards”), will vest in full and be converted into a right to receive an amount in cash equal to the product of the number of Shares subject to such Company Award (and assuming target levels of achievement under the respective award agreement and Company equity incentive plans) multiplied by the Per Share Amount less any exercise price. All such amounts payable by the Company with respect to Options, Restricted Shares and Company Awards will be paid as soon as practicable following the consummation of the Merger.

The Merger Agreement contains customary representations, warranties and covenants of the parties. Under the terms of the Merger Agreement, the Company has also agreed to certain

 

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covenants prohibiting the Company from soliciting, or providing information or entering into discussions concerning proposals relating to alternative business combination transactions, except in limited circumstances relating to unsolicited proposals that are, or may reasonably be expected to become, a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement contains customary termination rights of the Company and Parent, including by the Company in order to accept a Superior Proposal. Upon termination of the Merger Agreement under specified circumstances, the Company will be required to pay Parent a termination fee of approximately $43.5 million.

The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement attached as Exhibit 2.1 hereto, which is incorporated herein by reference. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Parent or Purchaser. In particular, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in confidential disclosure schedules provided by the Company in connection with the signing of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between the Company, Parent and Purchaser, rather than establishing matters of fact. Accordingly, the representations and warranties in the Merger Agreement may not constitute the actual state of facts about the Company, Parent or Purchaser.

 

ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT

If the Offer is consummated, the Company will experience a change of control. See the disclosures regarding the Offer and the Merger Agreement under Item 1.01 above, which disclosures are incorporated herein by reference.

 

ITEM 8.01 OTHER EVENTS

On January 14, 2010, the Company and Parent issued a joint press release announcing that they had entered into the Merger Agreement. The Company is furnishing a copy of the press release as Exhibit 99.1 hereto.

IMPORTANT NOTICE

This current report and the description contained herein are for informational purposes only and are not an offer to purchase or a solicitation of an offer to sell securities of the Company. The Company’s stockholders are urged to read the relevant Offer documents when they become available because they will contain important information that stockholders should consider before making any decision regarding tendering their Shares. Pursuant to the Merger Agreement, Purchaser will file tender offer materials with the Securities and Exchange Commission (the “SEC”) and the Company will file a solicitation/recommendation statement with respect to the Offer. The tender offer materials (including an offer to purchase, a related letter of transmittal and certain other documents related to the offer) and the Company’s solicitation/recommendation statement relating to the Offer will contain important information, which should be read carefully before

 

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any decision is made with respect to the Offer. The offer to purchase, the related letter of transmittal and certain other documents related to the Offer, as well as the Company’s solicitation/recommendation statement with respect to the Offer, will be made available to all stockholders of the Company at no expense to them. These materials will be made available for free at the SEC’s website at www.sec.gov. Additionally, Free copies of the offer to purchase, the related letter of transmittal and certain other offering documents will be made available by directing a request to Bare Escentuals, Inc., Attention: Investor Relations,71 Stevenson Street, 22nd Floor, San Francisco, CA, 94105.

Safe Harbor for Forward-Looking Statements

This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by words such as “anticipate,” “expect,” “believe,” “plan,” “intend,” “predict,” “will,” “may,” and similar terms. Forward-looking statements in this Form 8-K include, but are not limited to, the anticipated timing of filings and approvals relating to the transaction; statements regarding the expected timing of the completion of the transaction; statements regarding the ability to complete the transaction considering the various closing conditions; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. The forward-looking statements contained in this Form 8-K related to future results and events are based on the Company’s current expectations, estimates and projections about its industry, as well as management’s beliefs and assumptions. Forward-looking statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from the results discussed in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, uncertainties as to the timing of the Offer and the Merger; uncertainties as to how many of the Company’s stockholders will tender their stock in the Offer; the risk that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; the effects of disruption from the transaction making it more difficult to maintain relationships with employees, licensees, other business partners or governmental entities; other business effects, including the effects of industry, economic or political conditions outside of the Company’s control; transaction costs; actual or contingent liabilities; and other risks and uncertainties discussed in documents filed with the SEC by the Company, including the solicitation/recommendation statement to be filed by the Company. Investors and stockholders are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, the company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

 

Exhibit 2.1    Agreement and Plan of Merger, dated as of January 14, 2010, by and among Bare Escentuals, Inc., Shiseido Company, Limited and Blush Acquisition Corporation.
Exhibit 99.1    Press Release, dated as of January 14, 2010.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Bare Escentuals, Inc.
Date: January 15, 2010   By:  

/s/    MYLES MCCORMICK        

  Name:   Myles McCormick
  Title:  

Executive Vice President, Chief Financial Officer and

Chief Operating Officer

 

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EXHIBIT INDEX

 

Exhibit 2.1    Agreement and Plan of Merger, dated as of January 14, 2010, by and among Bare Escentuals, Inc., Shiseido Company, Limited and Blush Acquisition Corporation.
Exhibit 99.1    Press Release, dated as of January 14, 2010.

 

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